Money must grow on trees in Stamford.

In May, the mayor and elected boards approved a record $555 million in operating budgets and reserves for the city and WPCA, mostly covered by higher property taxes and another WPCA rate increase. They also approved a $43 million capital budget, to be funded mostly by issuing bonds.

Before the budget ink was dry, the mayor and boards whizzed through two more capital appropriations totaling $65 million to buy the Sacred Heart property on Strawberry Hill Avenue and build a new school. The schools superintendent promised she would try to trick the state into giving the city some money for the project, but it doesnt matter. The mayor and boards agreed to pay for it by issuing bonds.

I guess it doesnt matter that the 2014-15 capital budget more than doubled to more than $100 million even before the fiscal year started on July 1, or that the recommended safe debt limit is $30 million. It doesnt matter what it might cost to build new schools, repair existing schools, renovate police headquarters, replace the animal shelter, or repave crumbling streets. It doesnt matter whether the city prioritizes capital needs or manages its growth. When the city needs capital funding, it just issues bonds.

When a city says it will issue bonds, thats code for saying it will borrow money. Stamford usually issues general obligation (GO) bonds, which is code for saying that city officials borrow and spend the money today, and city taxpayers are generally obligated to pay it back tomorrow. Bonds are like a mortgage: a bond issued today has to be paid back, with interest, every year for at least the next 20 years. Those annual payments are called debt service.

The problem is that city officials never talk about debt service. Instead, they pretend that issuing bonds is like winning a lottery. When Stamford issued $50 million in GO bonds in August, city leaders thumped their chests about Stamfords strong financial health and crowed about how much money taxpayers will save because of the administrations hard work.

I guess it doesnt matter that the $50 million bond issue will actually cost taxpayers another $3 million a year over the next 20 years. It doesnt matter that the combined debt service for the city and WPCA has increased by $25 million in the last 10 years (during a period of historically low interest rates), or that Stamford taxpayers and WPCA ratepayers are paying $60 million in debt service this year.

That doesnt include payments to the Harbor Point Improvement District. Harbor Point is a tax increment financing (TIF) district, so the city gives Harbor Point 50 percent of all the new property taxes from Harbor Point to help pay its TIF bond debt service. That payment is $5 million this year but its not called debt service in the city budget -- its called a reserve. Its confusing because most people think a reserve is money saved, not money spent, but it doesnt matter.

None of it matters because money grows on trees in Stamford. Mill River trees, to be precise.

The Mill River Corridor is also a TIF district, and 50 percent of the new property taxes from that district are dedicated to the Mill River Parks debt service. In 2011, the Mill River folks borrowed $16 million in 30-year TIF bonds and optimistically promised their bond investors 7 percent tax-free annual interest. The Mill River TIF debt service is now more than $1 million a year.

The problem is that the Mill River TIF mostly consists of Mill River Park, which doesnt pay any property taxes, and RBS, which pays a lot less than everyone expected. Now the Mill River TIF is in an awkward situation: it doesnt have enough revenue to make the promised payments to its bond investors.

That should be the bond investors problem. When they made their investment in 2011, the bond offering statement included three pages explaining the financial risk and warning in bold capital letters that, in the event of insufficient TIF revenues, BOND NOT A DEBT OF THE STATE OR THE CITY OF STAMFORD. On five different pages, in capital and sometimes bold letters, it repeated:

NEITHER THE FULL FAITH AND CREDIT OF THE CITY OF STAMFORD, (NOR) THE STATE OF CONNECTICUT . . . IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS. NEITHER THE STATE OF CONNECTICUT NOR THE CITY OF STAMFORD SHALL BE OBLIGATED TO PAY THE PRINCIPAL OR REDEMPTION PRICE OR INTEREST ON THE BONDS.

It was crystal clear that Stamford taxpayers were not liable for the Mill River TIF bonds.

It doesnt matter. Three weeks ago the mayor and Board of Representatives agreed to borrow up to $22 million in taxpayer-funded GO bonds to give the Mill River bond investors their 7 percent tax-free interest for the next seven years and 100 percent return on their original investments.

I explained this to a friend who has a masters degree in business and a lot of experience in the financial industry. He said this is sort of how a Ponzi scheme works. He also said he wished the city would guarantee 7 percent tax-free interest on his investments, since the property taxes on his house went up by $7,000 last year.

The citys 2014-15 budget includes $1.1 million for the Mill River TIF reserve, $350,000 for the Mill River Collaborative, and $300,000 in capital funding to expand the park. I just read an article that the Mill River project also received $3.8 million from the federal Hurricane Sandy Resilience Grant Program -- almost half the grant money for the entire state of Connecticut. According to the article, the Mill River Collaborative pledged another $6.8 million in matching funds as a condition of the grant, but it didnt say who is paying for that.

Lets hope the Mill River folks plant some more of those money trees fast.

Mary Uva is a former member of the Board of Representatives.



CPA Tom Walpole discussed methods for handling student loans Monday on News 8 at Sunrise.

Walpole said students loans are becoming a larger part of peoples financial lives. On average, American student graduates have nearly $30,000 in loans from undergraduate school. Depending on where they borrowed the money from, private lenders or the government, putting off paying those loans for a year could cause them to increase 8 percent to 10 percent.

Walpole said a plan should be made to pay them off as soon as possible. He said students should begin by finding out how much they owe and not leave the financial matter to their parents. To learn how much you owe students can visit the following sites:

For federal loans, the National Student Loan Data System at www.nslds.ed.gov
For private loans, www.annualcreditreport.com

Students should then prioritize their loans by making a spreadsheet with the terms of each. If unable to pay all the loan bills each month, students should play off the loans with the highest rates first. No matter what, student loan bills should not be ignored. Failure to pay each month will affect your credit score and make it more difficult to refinance the loans or borrow money for other purposes.

When it comes to refinancing, Walpole said students need to look around to see what options are available. Private loans may be able to be refinanced at better rates. He noted lender like credit scores of 660 or better. Government loans have many options, depending upon the type of loan and the situation of the borrower. Some may be consolidated for ease of payment and often a more favorable rate. Some may be able to be deferred if certain conditions are met such as unemployment, military service or serving in the Peace Corp. Some borrowers may be granted a forbearance of principal of up to 12 months for illness, or medical internships or if they are teaching in certain designated districts. There are government programs that tie payments into a borrowers income level and there are also federal loan forgiveness programs that forgive loans after 120 on-time qualifying payments.

Walpole also said students need to be wary of scams to reduce their debt, and remember that if they dont pay the IRS will target your tax refund.

For more information on handling student loans, Walpole said there is a good website for reviewing your options, click here.




Now that the city can borrow money again, should it proceed with refurbishing the depot? - Decatur Daily: Home

Arita Sarkar and Vikrant Dadawala

Students face penalties for minor infractions like feeding stray dogs on campus to serious offences such as possessing marijuana or alcohol.

Students of Indian Institute of Technology Bombay facing the prospect of paying weighty fines for violating college rules are relying on their seniors to bail them out of trouble. Rather than cadge money from their parents, students are relying on the munificence of IIT B alumni to help pay penalties for minor infractions like feeding stray dogs on campus (Rs 500) and serious offences such as possessing marijuana or alcohol (Rs 2,000-Rs 5,000).

An M-Tech student of computer science told Mumbai Mirror that instead of telling parents about the fines, we borrow the money from seniors who have already got placements and will pay them back when we find jobs. Though most students currently engaged in studies at the institution did not wish to comment on this practice, several were willing to commit to the record that community service was a better punitive measure than fines.

Other stratagems employed by students hew to conventional practices: money required for impending birthday celebrations, mummy-I-brokemy-drum-kit, and befriending (and bribing) guards to avoid the registration of a formal complaint and hence prevent the payment of fines. Once your ID card number has been noted, theres no way of escaping the fine. The trick is to avoid reaching that stage -speaking to the security officer in Marathi or telling him its your first birthday as an adult are good ideas. If we dont misbehave then they let us through, said a fourth year student.

According to a recent article in the campus newsletter, the policy of monetary fines, introduced in 2007, was developed to serve as a middle path between letting students off with a warning or having them face the Disciplinary Action Committee. But with fine amounts ranging up to Rs 10,000, students said the policy may end up being unfair to students from middleclass or poor backgrounds, while failing to serve as an adequate deterrent to students from rich backgrounds.

Anshul Awasthi, editor of the newsletter, said, There are no guidelines and the fines imposed are completely arbitrary. While Rs 5,000 or Rs 10,000 will not seem too heavy a burden for students from wealthy families, in other cases it will be the parents who will have to suffer for the faults of their children.

Instead, according to added Chirag Chadha, another editor at the newsletter, believe community service could prove to be a better deterrent as well as a good way of ensuring that erring students give something back to the IIT community. Abbas Ali Bohra, general secretary of the student council, agreed. The system is inequitable and if community service is proved to be a better solution, the student council will happily support it, he said.

A senior IIT B administration officer told Mumbai Mirror that the fines were introduced following a series of bad experiences.

Violations including consuming alcohol and arguing with the security all levy a fine, he said. For smaller offences like bringing and feeding animals in the hostels, we do warn the students before we impose the fine to discourage them from repeating. The official added that motorised vehicles were banned on campus in 2003 after a student met with an accident and died.

Urijit Yajnik, dean of student affairs said, The students have a forum to voice their opinions. If they have complaints with the fines being imposed, they can convey it to us through their student representatives.



PENALTY CHART, COMPILED BY IIT-B STUDENTS

Rs 300-500: Feeding dogs within a 15m radius of the hostel

Rs 1,000-2,000: Destroying furniture or defacing walls

Rs 2,000: Carrying or consuming alcohol or drugs

Rs 5,000: Repeat offences related to banned substances

Rs 10,000 +: Rarely invoked, for serious offences. Committing the same violation multiple times could also lead to the fine.




AT OTHER COLLEGES

Tata Institute of Social Sciences: Students are apparently fined Rs 500 if cigarettes are found in their hostel rooms and Rs 1,000 if alcohol is discovered. Students found drunk may be asked cough up Rs 2,500. But students said officials rarely impose fines amounting of over Rs 1,000.

Somaiya College: Students living in hostels face a range of penalties. A student who takes a leave of absence from the hostel without informing officials can be fined Rs 250. If the student remains absent for the second day, the amount increases to 500. If a student turns up drunk at the hostel, he/she will face a fine of Rs 500. Alcohol possession directly leads to a call to parents, who are then required to sign an undertaking.

A penalty of Rs 250 to Rs 500 is imposed on hostel members who regularly miss prayer meetings. There is also a strict dress code policy.

We are not allowed to wear short clothes as its a co-ed hostel. Breaking the rule can lead to fines of Rs 250 to Rs 500, another student said.

Around 120 female students and 300 male students live in the hostel.

Somaiya College officials, however, denied imposing any penalties.